Senate Approves FY 09-10 Budget Proposal

$27.3 billion plan reflects and responds to tough state economic climate

The Senate's approval of a budget proposal for Fiscal Year 2009-10 highlighted the legislative actions of the Session week of May 4, according to Senator Bob Robbins (R-50). Senate Bill 850, a $27.3 billion budget that reduces spending by just over 1 percent from the current year, now goes to the House of Representatives for consideration.

Senate Bill 850 reflects and responds to Pennsylvania's tough economic climate. State revenues came in nearly $1 billion below estimate for the month of April, showing that Pennsylvania's economy continues to be in a downturn. Overall, Pennsylvania is facing a potential total shortfall of $2.9 billion or higher by the end of the current fiscal year on June 30.

"The options facing the Commonwealth are simple. The harsh reality is Pennsylvania is facing a $3 billion revenue shortfall by the end of the current fiscal year. We either cut spending to reflect the current economic climate in Pennsylvania or we raise taxes and I haven't heard one compelling reason in favor of raising taxes," Senator Robbins said. "That tactic was tried in 1991 during a milder recession and we ended up losing jobs as a result. It is truly regrettable that many good, worthwhile programs and services will see reductions or elimination of their state funding under Senate Bill 850. However, we have to make a fundamental choice as to whether we want to cut spending and speed up our state recovery or raise taxes and mortgage Pennsylvania's economic future. I and a majority of my colleagues agreed that the only real option was to reduce state spending."

During a milder recession in the early 1990s, Pennsylvania experienced a similar catastrophic revenue shortfall when the Commonwealth amassed a billion dollar deficit and, in response, raised taxes by $3 billion. That response devastated the Commonwealth's economic climate and reduced its competitiveness with other states.

No tax increases are required for this budget as proposed in SB 850 and it maintains the $750 million balance in the Rainy Day Fund. In his budget proposal, Governor Rendell called for drawing down the Rainy Day Fund and imposing tax increases on natural gas extraction, cigarettes and other tobacco products, and retailers who collect the sales tax.

Every spending cut recommended by Governor Rendell is included in SB 850. However, additional cuts were necessary to bring this budget into balance. The Legislature will be called on to share its burden of cuts as well – and we are committed to doing that. The General Assembly's operating line items are reduced by about 10 percent. In addition, $100 million of the General Assembly's reserves would be redistributed into the General Fund

Overall, SB 850 includes approximately $24.6 billion in state funds, plus $2.7 billion in federal stimulus funds. More than $728 million of federal stimulus funds is allocated for basic education to maintain state support for Pennsylvania's school districts at the current year level. An additional $720 million in federal stimulus money will go directly to Pennsylvania school districts through existing funding streams. Every school district in the 50^th Senatorial District will receive funding increases under SB 850.

Other bills approved by the Senate during the Session week of May 4 include:

Senate Bill 33, co-sponsored by Senator Robbins, restricts the ability of counties and municipalities to alter an election district between June 1, 2009 and November 30, 2012, or through resolution of all judicial appeals to the 2012 Congressional Redistricting Plan, whichever is later.

Senate Bill 59requires family day care homes to carry liability insurance and provide parents with information on compliance history and how to file complaints. The legislation also permits the Department of Public Welfare to order an immediate emergency closure of a family day care home upon evidence of gross incompetence, negligence, misconduct, mistreatment and/or abuse.

Senate Bill 142 authorizes the 27 licensing boards and commissions within the Department of State's Bureau of Professional and Occupational Affairs (BPOA) to require anyone found to be in violation of a licensing act or regulation to pay the costs associated with investigating the violation. The bill also increases the maximum civil penalty that a licensing board or commission can impose from $1,000 to $10,000.

Senate Bill 446, co-sponsored by Senator Robbins, eliminates the requirement that local registrars transmit death certificates to county boards of elections. The legislation requires the Department of Health to report death information electronically to the Department of State to be entered into the "SURE" system or a similar successor system, to be used by the county boards of election to remove deceased individuals from their voter registration rolls.

Committee Roundup

The Senate Appropriations Committee approved legislation that would provide transparency and oversight of all federal stimulus dollars spent in Pennsylvania as well as a bill that would authorize specialized "problem-solving courts" in Pennsylvania. The bills approved by the Committee include:

Senate Bill 6, co-sponsored by Senator Robbins, would create a bipartisan nine-member commission to provide oversight and accountability for all funds distributed to Pennsylvania through the federal stimulus funding. In addition to monitoring all grant programs and state contracts issued as part of the stimulus package, the commission will be asked to make recommendations to enhance the Commonwealth's ability to create jobs and identify ways to prevent waste and fraud. The commission's reports and transcripts will also be available online in a database accessible to the public, as well as searchable information on how stimulus dollars are being spent. The website will offer greater transparency of stimulus spending.

Senate Bill 81 provides for the sale of wine at kiosks operated by the Pennsylvania Liquor Control Board (PLCB); authorizes the PLCB to sponsor "spirits" events for education purposes; permits the PLCB to establish customer relations marketing programs; and clarifies that a member of a governing board of a public authority may have an interest in a beer distributor.

Senate Bill 383 encourages the use of mental health courts and drug courts to divert non-violent offenders from more costly jail cells and encourages rehabilitation through extensive supervision. Specialized problem-solving courts are being used across the nation to save money and help offenders who have particular issues including drug addiction and mental health issues.

The Senate Banking and Insurance Committee approved two bills that include provisions of the HealthNET PA legislative package.

House Bill 1089creates a Mini-COBRA Small Employer Group Health Plan in Pennsylvania for businesses with 2 to 19 employees. The federal stimulus act provides a 65 percent federal subsidy for COBRA premiums. The subsidy is good for up to nine months for those covered by COBRA, which pertains to businesses with 20 or more employees, as well as those in state programs such as the Pennsylvania Mini-COBRA program established by HB 1089.

House Bill 84 allows health insurers to withhold payment to providers in the event of a preventable serious adverse event. Specifically, a "preventable serious adverse event" is defined as a condition or negative consequence of care that results in unintended injury or illness that could have been anticipated and prepared for, but occurs because of an error or other system failure, and results in a patient's death, loss of a body part, disability, or loss of bodily function lasting more than seven days.

The state Senate Environmental Resources and Energy Committee approved six bills including legislation to extend the deadline for submitting a Pennsylvania Climate Change action plan and tighten Marcellus Shale gas well reporting requirements. The committee improved the following bills:

Senate Bill 297 requires Marcellus Shale gas well operators to submit a semi-annual report in addition to the existing annual report, and requires the Department of Environmental Protection to post well production information online. The legislation is intended to encourage additional interest and investment in the Marcellus Shale in Pennsylvania.

Senate Bill 617, co-sponsored by Senator Robbins, establishes the Heritage Areas Program to identify, protect, enhance and promote the historic, recreational and scenic resources of Pennsylvania.

Senate Bill 783 amends the Hazardous Sites Cleanup Funding Act to change the date the annual report on the Hazardous Sites Cleanup Fund is due from August 31 to December 31. The bill was amended to also require any fines imposed under the Hazardous Sites Cleanup Act (HSCA) to be deposited into the HSCA Fund.

Senate Bill 829 extends the timeframe for submittal of the PA Climate Change Action Plan and restores a 60-day public comment period.

House Bill 262 encourages the continued use of prescribed burning for fuel reduction, ecological, forest, wildlife and grassland management purposes.

House Bill 263 requires zoning ordinances to protect the Appalachian Trail.

The Senate Veterans Affairs and Emergency Preparedness Committee approved Senate Bill 303, a measure encouraging regionalization and partnership efforts among volunteer fire departments. The Committee also approved Senate Bill 196, a measure co-sponsored by Senator Robbins that would extend educational leave of absence to the spouse of a member on active duty.

Contact:

Michael Hengst
(717) 787-1322